Correlation Between Federated Total and Federated Ultrashort
Can any of the company-specific risk be diversified away by investing in both Federated Total and Federated Ultrashort at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Federated Total and Federated Ultrashort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Total Return and Federated Ultrashort Bond, you can compare the effects of market volatilities on Federated Total and Federated Ultrashort and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Federated Total with a short position of Federated Ultrashort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Total and Federated Ultrashort.
Diversification Opportunities for Federated Total and Federated Ultrashort
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and FEDERATED is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Federated Total Return and Federated Ultrashort Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Ultrashort Bond and Federated Total is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Federated Total Return are associated (or correlated) with Federated Ultrashort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Ultrashort Bond has no effect on the direction of Federated Total i.e., Federated Total and Federated Ultrashort go up and down completely randomly.
Pair Corralation between Federated Total and Federated Ultrashort
Assuming the 90 days horizon Federated Total Return is expected to generate 5.19 times more return on investment than Federated Ultrashort. However, Federated Total is 5.19 times more volatile than Federated Ultrashort Bond. It trades about 0.15 of its potential returns per unit of risk. Federated Ultrashort Bond is currently generating about 0.08 per unit of risk. If you would invest 936.00 in Federated Total Return on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Federated Total Return or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Total Return vs. Federated Ultrashort Bond
Performance |
| Timeline |
| Federated Total Return |
| Federated Ultrashort Bond |
Federated Total and Federated Ultrashort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Total and Federated Ultrashort
The main advantage of trading using opposite Federated Total and Federated Ultrashort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Total position performs unexpectedly, Federated Ultrashort can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Federated Ultrashort will offset losses from the drop in Federated Ultrashort's long position.| Federated Total vs. Federated Emerging Market | Federated Total vs. Federated Mdt All | Federated Total vs. Federated Mdt Balanced | Federated Total vs. Federated Global Allocation |
| Federated Ultrashort vs. Rationalpier 88 Convertible | Federated Ultrashort vs. Ab Bond Inflation | Federated Ultrashort vs. Ms Global Fixed | Federated Ultrashort vs. Calamos Dynamic Convertible |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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